Providing valued services to nonprofits by leveraging a for-profit venture

Dana Dunmeyer is the executive director of the Beracha Foundation, and president and CEO of TQINet Inc., an IT solutions company. Kathryn Engelhardt-Cronk, co-founder and CEO of MissionBox, talks to Dana about providing technology services to nonprofits and striking a balance between for-profits and nonprofits to leverage success for both.

Tell me a little bit about your background. You started a company that provides technology solutions and support. Where did the nonprofit angle come in?

We started our first for-profit company in 1995. I was chief cook and bottle washer. We grew it up to be a pretty healthy size and sold it at the height of the dot-com days.

Previous to owning a technology company, I was a pastor for 20 years. I understood faith-based and other similar nonprofits. I understood what their needs were; what makes them tick. After having been brought through the process of understanding the fundamentals of business and technology, I said, "Let's do [the same] for the nonprofits."

Do you charge nonprofits for your services?

We do. But we highly subsidize everything. Where a banking client [on our for-profit side] may pay anywhere from $75 to $250 an hour for something, we guarantee the nonprofits will never pay more than $50 an hour.

Although we're charge nonprofits for software or infrastructure, our approach is to price it right and give them the best of the best. They need the best software to help them to accomplish their goals. The majority of our profits from the work we do with for-profits go into The Beracha Foundation, which provides subsidies for our work with nonprofits.

We feel a mandate to provide up to 100 percent of everything that we do at no cost, but we just to go about it now in a different way. We work with the executive directors or presidents of the organizations and their board, their leadership team at the highest level. We help them to present their need along with what we do and how we're doing it for collecting corporate sponsors for these nonprofits.

We're impacting nonprofits in New York, Ohio, Georgia, Los Angeles, Indianapolis and Texas, just with their donor constituents and sponsorships. But we're doing this now on a basis more and more and more. An organization says, "Listen, we've got a great vision. We don't have great money." We try to help them to get up to 100 percent of our services at no cost.

A few have done that for a year or so. The ultimate goal is to wipe out that entire line item for IT and say to these nonprofits, "We'll help you with that. We'll take care of that as much as we humanly can." We consider ourselves a mission partner because that's where we are focused. It's not just great IT, great consulting, process, etc.

By the way, we have a complete establishment of support that's up to 24/7 when they need it and then in 100 countries. But the other goal, again, is "Let's get it at a price you, guys, can afford."

Our average nonprofit has now been with us for over seven to eight years and some even more.

You've got high retention rates.

Yes. On the for-profit side, we've had GE for 21 years, while others have been with us for up to 16 years. And they're with us because of service; it's because of support. I think you can have an incredible product and lousy support and you're going to lose people. That's part of it.

The other side of the corporate sponsorship, that's, like, one out of five or six programs that we have. If we already have a corporate sponsor for our group and that company has had a good year, we're monitoring it. Now, we can take them back and say, "It's almost the end of your year. You can use a little tax break here. How about $25,000 over here for this special project, this special need?" So we're helping them through things like that.

Yes. There's a shift. I also think with this tech-embracing, new generations of folks who are in leadership roles in nonprofits, they get value for money when you use the right technology.

Yes. One of the other things that we have found -- and it's kind of weird, you don't find out until you get in and start embracing who they are, what the culture is --their DNA -- is that the vast majority of nonprofits that we've run into do not handle an understanding of what a value proposition is. The value proposition, if you're in a for-community profit company, "You've got a widget, I've got money, convince me your widget's worth my money, we'll do it." Whereas on the nonprofit side, they just don't get it. We want to help them to be sustainable. It's where we're going.

That's really the new philanthropy buzzword — sustainability. It isn't even growth anymore. You've got your infrastructure, not just IT but entire management, operations set up in such a way that you are sustainable.

It's fascinating you say that. We've been doing R&D for GE for a long time. We didn't realize that we were kind of skunk works program for them until we've been into it for eight years. Well, three years ago, we said, "Why aren't we doing this in the nonprofit world?"

In fact, we found one about four years ago. A faith-based radio station came to us and said, "We've got this software to manage share-a-thons and it's just not meeting our needs. We'd like you to build it for us and do the R&D, and we'll also invest in the development. We happen to have relationships with about 1,800 other faith-based radio stations and if you build it for us, we will invest all of our years of experience and knowledge of what the industry is about into it also. And if you go out and sell it to others, give us $0.20 on the dollar, and that will be sustainable for us."

We built it on a new platform that we had some help building it with for a bank. And now, we've rolled this out and it's in its third-generation. The radio station has raised over $13 million from our product. Now we have this specialized package now and we can scale it from the smaller stations through to a national network.

What's next?

So everything that we do now is focused on good marketing, good design and we've got a team of tremendous people doing this. And or nonprofits, all of what we do is very economical for them. We're subsidizing it way, way down.

It's smart on the for-profit's side too. We've zero bench time. Our people are off working on a new product or service up some customization work or things like that. So we've got 136 people that can just jump in and dive and we're scheduling work for our for-profits and nonprofits.